How children get ahead in life

The labour market prospects of children, that is, how much income they end up making as adults, are only loosely tied to the incomes of the families they were raised in. Much more than money matters in determining how children get ahead.

The study found that the type of income that fathers reported, particularly income from assets, had a major influence on the incomes children eventually earned as young adults. Just the existence of income from assets such as interest from savings accounts, investment income and dividends (let alone the amount) was strongly correlated with a child's eventual income.

The analysis was based on income tax information reported by 285,000 young men and women who were aged 28 to 31 in 1994. The total market income of these young adults was related to the incomes of their fathers and mothers in 1982 when the children were aged 16 to 19.

Along with the composition of the father's income, the study also determined that a child's prospects in the labour market were influenced by both family structure and the nature of the neighborhood in which the children lived.

Amount of father's income not the only issue

If money was the only issue, a dollar from earnings, a dollar from self-employment, a dollar from assets, or a dollar from government transfers or other sources should all have had the same impact on the ultimate success of children in the labour market. But this was not the case.

In fact, children whose fathers reported receiving some income from assets ended up earning $3,000 more in 1994 than children whose fathers did not report any asset income, but had the same overall level of income.

On the other hand, income from certain government transfers had a negative, or neutral, correlation with the adult earnings of children. Those children with fathers receiving income from Unemployment Insurance (UI), regardless of the amount, ended up making less.

Note to readers

This report is based on one of 11 studies in a new book, Labour markets, social institutions, and the future of Canada's children, released today. The book addresses two broad themes. First, it assesses how changes in labour markets have influenced the standard of living of families with children. It also looks at how social institutions, including the family and education and health care systems, work to determine the long-term status of children.

The information in this release is adapted from the chapter entitled "How to get ahead in life: some correlates of intergenerational income mobility in Canada". The analysis was based upon income tax information reported by 285,000 young men and women aged 28 to 31 in 1994. It excluded families headed by single mothers and those not residing in an urban community in 1982. All monetary values were presented in 1986 dollars.

The estimates of the degree of association between parent and child incomes took account of neighbourhood median income, the province of residence, and a number of individual and family characteristics, including the number of siblings. However, the effects of some socio-demographic factors also known to influence labour market experiences, such as parental education, immigrant status, and occupation, were not controlled for.

The incomes children eventually earn as adults were measured as total market income, defined as all income derived from market sources: wages and salaries, self-employment income, and asset income. Asset income is defined as net income from interest and investments, net income from real estate, dividends from Canadian corporations, and taxable capital gains and losses. Unemployment Insurance income refers to benefits obtained by parents in 1982. Therefore, the new name for this program, Employment Insurance, is not used.

Chart: Presence of father's asset income is strongly associated with adult incomes of children

One explanation for this is that the sources of the parent's income may serve as important signals for other factors influencing their children. For example, parents might be acting as role models for their children if they kept certain assets such as savings accounts, developing favourable attitudes toward saving or planning for the future.

The negative association of UI benefits may have reflected the fact that parents are likely to influence a child's occupation. For example, some jobs are more precarious, and probably pay less. Children taking up jobs of this kind will also likely need to rely on UI.

Family structure had strong impact on child's prospects

Family structure had a strong impact on the income that children will eventually earn as adults. The study showed that the individual who earned the family income was important in a child's development.

On average, increases in the father's income benefited sons twice as much as daughters. However, increases in the mother's income were of equal benefit to both sons and daughters.

Chart: Father's earnings affects son's income more than daughter's

Intangible resources in child's neighborhood

Intangible resources in the child's community, such as positive peer groups, greater possibilities for supportive relationships with adults outside the home, or a richer set of job contacts and role models, were also factors in higher adult incomes.

Teenagers who moved from one neighborhood to another were apparently less able to tap into a community's resources. In fact, those who moved end up earning anywhere from $500 to $2,000 per year less than their counterparts who did not experience a move.

Labour market has become much more turbulent for young people

Related studies in the same book found that the labour market has become much more turbulent to the point that young people starting their careers in the 1980s and 1990s are earning about 20% less than their counterparts from the 1970s. These changes have hit young men particularly hard.

In response, those individuals with strong family supports were able to live longer at home, and increase their educational credentials. This went hand in hand with delays in forming unions and with declines in fertility. Putting off marriage and childbirth until a young person obtains qualifications for better jobs reduces the chances that his or her children will be raised in a state of low income.

All of this, however, represents a best-case scenario: young people most likely to have followed this path tended to come from intact families and families with highly educated parents.

In contrast, young adults whose parents separated or divorced were more prone to cohabit, have children out of wedlock, or if they did marry, to face a greater risk of a break-up. The probability of cohabitation before the age of 25 was more than 70% higher among those whose parents were separated or divorced. Women who experienced the separation or divorce of their parents were almost twice as likely to give birth to a child before their 20th birthday than women from intact families.

Furthermore, young adults were more likely to earn lower incomes if they had experienced frequent residential moves as children, their parents had either lower levels of education or had less time to spend with them, and if their parents relied on non-market sources of income. Obviously, all of these risk factors are higher for those from families with divorced or separated parents.

Labour markets, social institutions, and the future of Canada's children (89-553-XPB, $35) is now available. See How to order publications.

For further information, or to enquire about the concepts, methods and data quality of this release, contact Miles Corak (613-951-9047; coramil@statcan.gc.ca), Analytical Studies Branch.

Help-wanted Index

October 1998

The Help-wanted Index remained unchanged at 144 in October (1996=100). Following steady increases that began in July 1996, the index has leveled off in the last six months.

Modest increases in Prince Edward Island (+5.0%), Manitoba (+2.5%) and Nova Scotia (+2.2%) were offset by small declines in Alberta (-2.6%), British Columbia (-1.6%), Quebec(-1.4%).

Table: Help-wanted Index
(1996=100)
______________________________________________________________________________
                               Oct. 1998       Sept. 1998        Oct. 1997    
______________________________________________________________________________

                                  Seasonally adjusted and smoothed            
                           _______________________________________________    
                                                                              
                                                                              
                                                                              
                                                                              
Canada                               144              144              131    
                                                                              
Newfoundland                         135              135              130    
Prince Edward Island                 148              141              126    
Nova Scotia                          140              137              130    
New Brunswick                        153              152              141    
Quebec                               140              142              117    
Ontario                              152              151              133    
Manitoba                             162              158              143    
Saskatchewan                         135              135              139    
Alberta                              149              153              154    
British Columbia                     120              122              122    

______________________________________________________________________________


                            Oct. 1997 to         Sept. to    
                               Oct. 1998        Oct. 1998    
______________________________________________________________________________

                              Seasonally adjusted and        
                                      smoothed               
                           ______________________________    
                                                             
                                                             
                                      % change               
                           ______________________________    
                                                             
Canada                               9.9              0.0    
                                                             
Newfoundland                         3.8              0.0    
Prince Edward Island                17.5              5.0    
Nova Scotia                          7.7              2.2    
New Brunswick                        8.5              0.7    
Quebec                              19.7             -1.4    
Ontario                             14.3              0.7    
Manitoba                            13.3              2.5    
Saskatchewan                        -2.9              0.0    
Alberta                             -3.2             -2.6    
British Columbia                    -1.6             -1.6    

______________________________________________________________________________

Note: The help-wanted Index measures the number of help-wanted ads published in 22 newspapers in 20 major metropolitan areas. The index is a measure of companies' intentions to hire new workers. These indices have been seasonally adjusted and smoothed to ease month-to-month comparisons.

Available on CANSIM: matrix 105 (levels 8 to 10).

For further information, or to enquire about the concepts, methods and data quality of this release, contact Gilles Groleau (613-951-4090; fax: 613-951-4087; labour@statcan.gc.ca ), Labour Division.

Steel primary forms

Week ending October 31, 1998 (preliminary)

Steel primary forms production for the week ending October 31, 1998, totalled 276 101 metric tonnes, up 16.4% from the week-earlier 237 274 metric tonnes and down 6.3% from the year-earlier 294 560 metric tonnes. The cumulative total at the end of the week was 13 355 867 metric tonnes, a 4.1% increase compared with 12 823 772 metric tonnes for the same period in 1997.

For further information, or to enquire about the concepts, methods and data quality of this release, contact Greg Milsom (613-951-7093; milsomg@statcan.gc.ca), Manufacturing, Construction and Energy Division.

Railway carloadings

September 1998

Carload freight (excluding intermodal traffic) loaded by railways in Canada totalled 20.8 million tonnes in September, a decrease of 3.3% from September 1997. The carriers received an additional 1.8 million tonnes from United States connections during September.

Intermodal (piggyback) tonnage of 1.5 million tonnes represented an increase of 2.3% from the comparable month last year. The year-to-date figures show a decrease of 2.0%.

Total traffic, consisting of carload freight and intermodal traffic, decreased by 2.9% during the reference month bringing the year-to-date total to 192.7 million tonnes, a decrease of 2.1% from the previous year. Receipts from United States connections increased 4.1% during the same period.

Cumulative data for 1998 and 1997 have been revised.

Available on CANSIM: matrix 1431.

The September 1998 issue of Railway carloadings (52-001-XPB, $11/$103) will be available shortly. See How to order publications.

For further information, or to enquire about the concepts, methods and data quality of this release, contact Robert Larocque (613-951-2486; fax: 613-951-0009; laroque@statcan.gc.ca ), Transportation Division.

Industry classification coding system

The Industry classification coding system (view ICCS screen display) helps find the most appropriate detailed industry code. This computer assisted industrial coding system helps both the novice coders as well as experienced coders. No longer do coders need to code by memory, learn new codes or spend hours searching through manuals to find the most appropriate industrial code. The ICCS provides codes for North American Industry Classification Standard Canada (NAICS), the 1980 Standard Industrial Classification (SIC), 1970 SIC, the 1987 United States SIC, as well as the International Standard Industrial Classification of all Economic Activity (ISIC Rev. 3) and the Statistical classification of economic activity in the European Community's standard industrial codes.

When a user enters a description of a business' major activity, the ICCS returns a list of potential matches, with codes at the lowest level industrial of the classifications such as the 1980 SIC-E and NAICS Canada. (The coder selects which classifications ICCS will use). The class definition is provided for each code in this list of potential matches. Using this information, the user can then select the best code to apply to the record's description. The ICCS will also do a search of concordances and show the relationships which exist between code values specified in the selected classifications. In addition, the coder may enter a valid code, at the lowest level of a selected classification and the ICCS will display the business activities associated with that code. Detailed class definitions for each classification in ICCS can be displayed, along with the code's place in the classification hierarchy.

By purchasing ICCS, a coder gains access to the same database and software Statistics Canada used to assign 1980 SIC and NAICS Canada codes to its records. Industry Classification Coding System (12F0074XCB, $300) is now available (Bulk order discounts apply). See How to order publications.

For further information about the Industry Classification Coding System, or to enquire about NAICS Canada Electronic Products, contact Kim Farrall (613-951-4245; farrkim@statcan.gc.ca ) SIC Coordinator, Standards Division.

National Private Vehicle Use Survey

1996

Data are now available from the 1996 National Private Vehicle Use Survey. Information in this microdata file refers to personal-use vehicles operated during the first nine months of 1996.

The purpose of the survey is to provide measures of vehicle-fuel use and the determinants of fuel use. The microdata file provides information on the size of the personal-use vehicle fleet, the amount of fuel used, the number of kilometres driven and other related information.

To order the microdata file (53M0003XDB, $2,000), contact Carol Nusum-Sol (613-951-4598; or 1 800 461-9050), Special Surveys Division.

For further information, or to enquire about the concepts, methods and data quality of this release, contact Stephen Arrowsmith (613-951-0566), Special Surveys Division.

Industrial Product Price Index - Erratum

The Industrial Products Price Index release of October 28, noted that, in August, exports did not fully regain their May figure. This statement referred to raw export figures. However, in seasonally adjusted terms, export figures reached a new high in August 1998.

For further information, or to enquire about the concepts, methods and data quality of this release, contact the Client Services Unit (613-951-3350; fax: 613-951-2848; infounit@statcan.gc.ca ), Prices Division.